Lower GDP means reason for caution: Murugappa Group

CHENNAI: After reporting a revenue growth of over 30% in the last fiscal, Chennai-based business house Murugappa group has hinted that caution could be part of its business strategy in 2012-13 on account of macro-economic headwinds.

A Vellayan, Executive Chairman of the group, told the media in Chennai, "The year 2012-13 will be challenging. The group is approaching it with confidence and a great deal of caution. We are likely to see lower GDP and that's the reason," he noted.

The group, with interests in fertilisers, sugar, engineering, finance and auto, posted a 10% higher net profit at Rs 1,304 crore in 2011-12. The turnover was Rs 22,314 crore.

Even with that guarded outlook, the group is hopeful of touching Rs 35,000 crore in revenues by 2013-14, a CAGR of 25% over the next two years.

Vellayan said the group would be more cautious about the engineering and fertiliser businesses, due to the possibility of input cost escalations.

Murugappa group also plans a capex of Rs 1,000 crore during this financial year, a good chunk of which is the unutilised part of last year's capex allotment. Last year, the group said it would spend about Rs 1,500 crore in capex, of out which only about Rs 630 crore was spent eventually.